Belize debt keeps growing

belize debtFriday, November 20th 2015. BMG:Belize’s national external debt at the end of 2014, according to Central Bank statistics, is in the range between $2.2 and $2.3 billion with a cumulative interest rate of around 3.7 percent which amounts to around $84 million in interest alone.

According to the 2014 report, the 2038 restructured bond accounted for 46.8 percent of the external debt and loans from multilateral institutions accounted for 28 percent at the end of the year.

The Caribbean Development Bank (CDB) and the Inter-American Development Bank (IDB) were the principal multilateral creditors, the report said. Due to sizable disbursements from Venezuela, the share of bilateral funding agencies increased from 22.3 percent to 25 percent with Venezuela accounting for a little over half of the bilateral debt stock and overtaking the Republic of China and Taiwan as Belize’s largest bilateral creditor.

Venezuelan disbursements to Central Government totaled $115.7 million and accounted for 97.9 percent of bilateral disbursements and 67.5 percent of all foreign borrowing during the year. Bilateral disbursements were used for budgetary support and to finance several investment and infrastructural projects that included the National Bank, Golden Stream Big Falls border road project, Corozal border rehabilitation, and upgrades to the national road and drainage networks.

Since then, with additional borrowing through PetroCaribe the estimated debt to Venezuela is around $300 million.

According to the report, at $153.2 million, debt service payments were $29.4 million higher than the amount paid in 2013. Principal payments remained relatively stable at $79.0 million, while interest payments saw a resurgence to $73.6 million due to the resumption of bi-annual interest payments on the 2038 restructured bond, it said.

Central Government repaid $31 million to bilateral lenders, most of which went to ROC/Taiwan, and $36.5 million to multilateral creditors, mainly the CDB and the IDB. The financial public sector, namely the Development Finance Corporation (DFC) and the Central Bank, made respective repayments of one million to CDB and $1.8 million to the International Monetary Fund (IMF) to retire the Emergency Natural Disaster Assistance loan. The non-financial public sector paid $4.1 million to the CDB and $3.9 million to commercial suppliers.

At the end of 2014, Central Government accounted for 96.5% of the outstanding external debt, and the financial and non-financial public sector for 2.6% and 0.9%, respectively. During 2015, the report said, $0.6 million of the present portfolio is scheduled to mature, and $178.3 million will mature during the next ten years, leaving $2 billion of the national debt with a maturity schedule that exceeds ten years.

It was expected that litigation for the Belize Electricity Limited (BEL) and Belize Telemedia Limited (BTL) would have had a negative impact on the country’s debt profile but the recent settlements have lifted the burden of those pending decisions. Still, the settlements came at a price. The $162 million BTL settlement still hasn’t been finalized with an international tribunal set to decide the worth of BTL shares which may yet drive out the total cost of that settlement.

With the start of a new year at hand it will be interesting to see the new Central Bank report factoring all the borrowing done by GOB over the last year from institutions like the IDB, IMF, World Bank and others.


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